Supreme Court Ruling: Victory for Consumer Class Action Plaintiffs

In a 6-to-3 vote that favors class-action plaintiffs, the Supreme Court ruled that courts cannot dismiss lawsuits because a defendant offers a full settlement in advance.

“Once unaccepted, the offer is off the table,” Justice Ruth Bader Ginsburg said in summarizing her majority opinion from the bench.

“In dissent, Chief Justice John G. Roberts Jr. said that approach gave plaintiffs too much power. “If the defendant is willing to give the plaintiff everything he asks for, there is no case or controversy to adjudicate, and the lawsuit is moot,” he wrote.”

The case, Campbell-Ewald Co. v. Gomez, No. 14-857, stems from a text message sent on behalf of the Navy to a man named Jose Gomez, in 2006. Mr. Gomez alleged he never opted into these messages and claimed the company violated the Telephone Consumer Protection Act (TCPA). Gomez intended for the suit to be a class action, representing consumers who received similar texts without permission. But, before he could file a class suit, Campbell offered Mr. Gomez a settlement and moved to dismiss the case although he had declined the offer.

The company argued the case should have been dismissed as moot because the settlement Campbell offered would have provided Gomez with complete relief. Moreover, Mr. Gomez would have received $1,500, which is three times the statutory penalty for the alleged violation.

Campbell further claimed, that because Gomez was yet to file his motion for class certification, any related class-action was similarly mooted.

But both a U.S. District Court and the Ninth Circuit appeals panel held that Campbell couldn’t moot the class action by making an offer that was rejected by the plaintiff. “The courts disagreed on whether Campbell enjoyed ‘derivative sovereign immunity’ from TCPA-related lawsuits because of its position as a contractor for the Navy.”

This decision is a rare pro-consumer ruling from this court, which has repeatedly sought to stifle consumers’ access to the legal system.